India to gradually move to gas-based economy – Minister

India to gradually move to gas-based economy – Minister

India plans to shift to a gas-based economy by boosting domestic production and buying cheap

liquefied natural gas (LNG) as the world’s third-biggest oil importer seeks to curb its greenhouse

emissions, oil minister Dharmendra Pradhan said.

New Delhi has promised to shave a third off its emissions rate by 2030, partly by boosting the use of

cleaner burning fuels.

“Gradually we are shifting towards a sustainable gas economy,” Pradhan told Reuters in an


Gas accounts for about 8 percent of India’s energy mix, while oil accounts for more than a quarter.

India’s gas supply deficit is expected to widen from 78 million cubic metres a day (mscmd) this fiscal

year to 117 mscmd in 2021-22, according to a government estimate.

India recently negotiated better terms for a long-term LNG deal with Qatar and importer Petronet

LNG is in talks with Exxon to renegotiate pricing for gas from Australia’s Gorgon project.

“The price should be affordable to us. We respect long-term contracts but everybody has to

appreciate the changing scenario,” said Pradhan. “In a bigger canvas … India has the potential of a

huge market base”.

Pradhan last month visited Saudi Arabia, the United Arab Emirates and Iran to deepen ties with its

main oil suppliers.

“We want to move beyond a buyer-seller relationship,” he said, adding that India was offering them

stakes in its pipelines, petrochemical complexes and refineries.

India is also in talks with Abu Dhabi National Oil Co and Saudi Aramco to lease strategic oil storage.


Pradhan said Prime Minister Narendra Modi’s visit to Iran later this month would “certainly” deliver

concrete results.

Iran has set aside its Farzad B gas field for development by Indian firms, a move that could result in

the building of an LNG plant as India consumes or markets its production share, he said.

Over two years Asian LNG prices have slumped by three quarters to $4.65 per million British thermal

units (mmBtu).

Pradhan expects hefty LNG investments worldwide to ensure affordable long-term prices, a trend

that “will suit India as a consuming country.”


India is building import terminals on its eastern and western coasts and pipelines to boost industrial

use of gas.

In the fiscal year to March, India’s gas production declined by about 4.2 percent, while imports rose

around 15 percent.

India recently offered better gas pricing to boost domestic output, but its most recent investment in

an LNG terminal in the southern state of Kerala has been underutilised since it lacks pipelines to

connect to demand centres after farmer opposition caused land acquisition problems.

Pradhan said the government was talking to the states and hoped obstacles to a pipeline connecting

Kochi to Mangalore would be resolved after state elections in Kerala. (Writing by Nidhi Verma;

Editing by Ed Davies)–


Share Button